ASPOCOMP GROUP OYJ STOCK EXCHANGE RELEASE Aug 5, 2004 at 8:00 AM 1(14)ASPOCOMP GROUP INTERIM REPORT 1.1. – 30.6.2004
STRONG SALES GROWTH CONTINUED DURING THE SECOND QUARTER, AND
EARNINGS PER SHARE INCREASED TO EUR 0.26During the second quarter of 2004, Aspocomp increased its net sales
by 26% to EUR 52.9 million, while the earnings per share increased
to EUR 0.26 (-0.58). Net sales during January-June 2004 increased to
EUR 100.5 million (83.2) and earnings per share increased to EUR
0.43 (-0.62).Highlights of second quarter 2004 (all comparisons are year on year
to second quarter 2003 results):– Net sales increased to EUR 52.9 million (42.1). Net sales showed
rapid growth at ACP Electronics, the Chinese subsidiary of Aspocomp,
and at the Finnish PCB factories. The Mechanics and Modules business
segment also showed strong growth.– Operating profit increased to EUR 3.8 million (-6.3), representing
7.2% of net sales (-15.0%). The corresponding figure for the
previous year includes one-off expenses that amount to EUR 4.8
million. Profitability was particularly improved by the strong
increase in volumes.– The profit before tax increased to EUR 3.5 million (-6.6), and
earnings per share increased to EUR 0.26 (-0.58).– Cash flow from operations totalled EUR 5.2 million (1.7).
– Investments amounted to EUR 3.7 million (4.7). The most significant
investments were made to improve technology at the Salo PCB factory.Prospects:
– Net sales and earnings in July-September are expected to improve
somewhat from the second quarter. Net sales, operating profit and
earnings per share for the whole year are expected to be
significantly better than in the previous year.MAIJA-LIISA FRIMAN, PRESIDENT AND CEO OF ASPOCOMP:
“The sales of Aspocomp continued their rapid growth during the
second quarter. There was a strong demand for printed circuit boards
and for products of the Mechanics and Modules segment, which was
2(14)
slightly better than we expected. In addition to increased
deliveries, profitability was also improved by increased
productivity of manufacturing processes in China and the increased
share of high-tech PCBs in Aspocomp’s product portfolio.Our investment in China, which started in 2001, was well-timed, and
it has significantly increased our capacity to manufacture
HDI/Microvia PCBs. The share of these high-tech PCBs in the PCB
segment net sales increased to 60% during the second quarter. During
the present quarter, the capacity of our factory in China to
manufacture HDI/Microvia PCBs will increase 1.5-fold, thanks to our
current expansion investment.The utilization rates of our factories have continued to stay at a
good level during the first half of the year. Aspocomp’s major
challenges for the future include securing business growth
possibilities to meet customer needs in a flexible and cost-
effective way.Our joint ventures Asperation and Imbera Electronics, which develop
new technologies, are currently co-operating with customers in
several pilot projects.”NET SALES AND PROFIT, APRIL-JUNE 2004 (comparison figures are for Q2
2003)Net sales totalled EUR 52.9 million for the second quarter compared
with EUR 42.1 million during the corresponding period of the
previous year. Profit before depreciation totalled EUR 10 million,
18.8% of net sales (EUR 3.4 million, 8.1%). The operating profit was
EUR 3.8 million (-6.3).Net financial expenses amounted to EUR 0.3 million (0.3). Profit
before taxes amounted to EUR 3.5 million (-6.6), and profit after
taxes and minority interests was EUR 2.5 million (-5.8). Earnings
per share totalled EUR 0.26 (-0.58). Cash flow from operations
totalled EUR 5.2 million (1.7).NET SALES AND PROFIT, JANUARY-JUNE 2004 (comparison figures are for
Q1-Q2 2003)During the first half-year, net sales of the Aspocomp Group
increased to EUR 100.5 million (83.2). The increased net sales both
in the PCB segment and in the Mechanics and Modules segment resulted
3(14)
mainly from markedly increased volumes. The changes in the USD-EUR
exchange rate had a 3% negative effect on net sales.During the first half-year, net sales of the Aspocomp Group were
divided by region as follows: Europe 67% (69%), Asia 17% (15%) and
the Americas 16% (16%). Share of net sales of the Finnish factories
were 68% and the Asian factories were 32%.Approximately 70% of Group net sales were accrued by products used
in mobile phones and telecom systems, and approximately 30% were
made up by automotive, industrial and consumer electronics.The Group’s five largest customers, Nokia, Ericsson, Sanmina-SCI,
Philips and Siemens, accounted for 61% of net sales (60%) during the
first half-year.Operating profit before depreciation was 18.6% of net sales (10.6%),
amounting to EUR 18.7 million (8.9). Operating profit was EUR 6.5million (-8.0). The improved profitability was specifically
attributable to the considerably increased delivery volumes and the
restructuring carried out in the Group during 2003. Profitability
was also improved by better efficiency at ACP Electronics, and the
increased share of high-tech PCBs in Aspocomp’s product portfolio.Net financing expenses amounted to EUR 0.6 million (0.8), and profit
before taxes was EUR 5.8 million (-8.8). The profit for the period
after taxes and minority interests increased to EUR 4.3 million (-
6.2), and earnings per share increased to EUR 0.43 (-0.62). Cash
flow from operations totaled EUR 9.8 million (4.5).BUSINESS SEGMENTS
Printed Circuit Boards
Net sales of the PCB segment increased by 26% during the second
quarter, amounting to EUR 40.5 million. The increase was mainly
attributable to the rapid growth in delivery volumes. The PCB price
level remained relatively stable. Pressures in raw material prices
are estimated to lead to the raising of prices for some products
during the latter half of the year.The demand for PCBs increased strongly during the second quarter.
There was a particularly strong demand for PCBs for mobile handsets,
where the sales of Aspocomp increased by more than 50% compared with4(14)
the same period in the previous year. The deliveries of PCBs for
consumer electronics also showed marked growth.Most of the increase in sales of Aspocomp’s PCBs was contributed by
the Chinese subsidiary ACP Electronics, but the comparable net sales
of the factories in Finland (Salo and Oulu) also increased by almost
one-third. The growth of the factory in Thailand (P.C.B. Center) was
slower but exceeded 10%.During the second quarter, net sales of the PCB segment were divided
by region as follows: Europe 58% (65%), Asia 22% (21%) and the
Americas 20% (14%). Share of net sales of the Finnish factories were
56% and the Asian factories were 44 %.Operating profit of the segment was EUR 1.3 million (-7.7) during
the second quarter.Net sales of the PCB segment during January-June increased to EUR
76.9 million (64.1), resulted from positive growth in volumes. Net
sales figures for the previous year include the Teuva factory that
was divested by Aspocomp in 2003. During the same period in 2003,
the factory had net sales of to EUR 4.8 million. Comparable net
sales of the factories in Finland (Salo and Oulu) increased 28%,
while the factories in Asia (China and Thailand) increased their net
sales by 46%. The increased share of high-tech products and the
positive growth in volumes resulted in improved profitability
compared with the previous year. The operating profit for the
segment in January-June totaled EUR 2.6 million (-10.3).Mechanics and Modules
Net sales of the Mechanics and Modules business segment during the
second quarter increased by 24% to EUR 12.4 million (10.0). The
increase in the net sales was mainly attributable to positive growth
in volumes.The demand was especially strong in the telecommunication network
market, and the volume of deliveries in that area increased
significantly compared with the same period in the previous year.
The number of products delivered to the other branches of industry
remained at a good level. The price level remained relatively stable
during the period under review.The high rate of utilization of the capacity in the Mechanics and
Modules segment during the second quarter resulted in significantly
5(14)
better productivity than in the previous year. The operating profit
of the segment was EUR 2.5 million (1.4).Net sales of the Mechanics and Modules business segment during
January-June increased by 24% to EUR 23.7 million (19.1). The
increase in net sales was attributable to the fact that the telecom
network market picked up. The operating profit for the segment
improved to EUR 3.9 million (2.3).FINANCING, INVESTMENTS and EQUITY RATIO
The Group’s liquidity during the period under review was good. The
Group’s liquid assets totalled EUR 26.1 million (13.1). Interest-
bearing net debt totalled EUR 24.6 million (42.1), including EUR
24.5 million (28.2) in financial leasing liabilities consolidated in
the Group Balance Sheet. Gearing was 19.6% (34.7%), while gearing
without the consolidated financial leasing liabilities was 0.07%
(11.4%). Non-interest-bearing debts amounted to EUR 35.2 million
(27.6).Investments totalled EUR 6.1 million (6.2), or 6.0% of net sales
(7.5%). EUR 2.4 million of the investments were made in Asia and EUR
3.7 million in Europe. Net financial expenses as a percentage of net
sales totalled 0.6% (1.0%).The Group’s equity ratio at the end of June was 59.4% (59.5%).
SHARES AND SHARE CAPITAL
On 30 June 2004, the total number of Aspocomp shares was 10,041,026
and the share capital was EUR 10,041,026. Of the total, 100,000
shares are held by the company itself. The book countervalue of
these shares is EUR 100.000, and these shares represent 1% of the
total votes of all shares. The number of shares adjusted for
Aspocomp’s own shareholding was 9,941,026. During the period, a
total of 1,839,322 shares in Aspocomp Group Oyj were exchanged on
the Helsinki Exchanges. The grand total of these transactions
amounted to EUR 23,513,770.63. The lowest price paid for the shares
was EUR 11.63, the highest was EUR 14.54, and the average was EUR
12.78. The closing price on 30 June 2004 was EUR 12.80, and the
market capitalization of the company was EUR 127.2 million. Nominee-
registered shares represented 10.3% of share capital while 1.0% was
held directly by foreign shareholders.6(14)
On 2 April 2004, the Annual General Meeting of Aspocomp Group Oyj
authorized the Board of Directors to decide on acquiring and/or
conveying its own shares and on a shares issue and/or taking of
convertible loans. The authorizations are valid for one year from
the date of the Annual General Meeting. At the same time, the Annual
General Meeting cancelled similar authorizations granted on 4 April
2003. The Board of Directors has not used the authorizations granted
by the Annual General Meeting on 2 April 2004.PERSONNEL
The average number of employees in the Aspocomp Group during the
period 1 January – 30 June 2004 was 3,494 (3,101). At the end of
June 2004, there were 3,592 employees (3,234).Average number Average number Number Number
2004 2003 2004 2003
1.1.-30.6. 1.1.-30.6. 30.6. 30.6.Europe 994 1,129 1,063 1,145
Thailand 1,381 1,079 1,398 1,136
China 1,119 893 1,131 953
Total 3,494 3,101 3,592 3,234MANAGEMENT
On 2 February 2004, the Board of Directors of Aspocomp Group Oyj
appointed Ms Maija-Liisa Friman M.Sc. (Chem. Eng.) as the President
and CEO of the company. She took up her new position on 1 April
2004.The Annual General Meeting of Aspocomp Group Oyj held on 2 April
2004 approved the Board’s proposal for changing Articles 6 and 15 of
the Articles of Association, relating to the term of office of Board
Members, so that the Members are now elected for one year at a time.On 2 April 2004, the Annual General Meeting of Aspocomp Group Oyj
decided that the Board of Directors shall consist of six Members.
Aimo Eloholma, Roberto Lencioni, Tuomo Lähdesmäki, Gustav Nyberg and
Karl Van Horn were re-elected as Board Members, and Anssi Soila was
elected as a new Member. The authorized public accounting firm
PricewaterhouseCoopers Oy was appointed as the Auditor for the
company.7(14)
In its organization meeting on 2 April 2004, the Board re-elected
Tuomo Lähdesmäki as Chairman of the Board, while Karl Van Horn was
elected as Vice-Chairman. As members of the Compensation and
Nomination Committees, the Board elected Aimo Eloholma, Roberto
Lencioni and Tuomo Lähdesmäki, who was also appointed as Chairman
for both committees. Karl Van Horn, Gustav Nyberg and Anssi Soila
were elected by the Board as members of the Audit Committee. The
Board appointed Gustav Nyberg as Chairman of the Audit Committee.On 2 April 2004, the Board decided that each Member of the Board
shall spend 40% of his annual remuneration in buying shares in the
company during the period 10 May – 18 June 2004, which took place
within the limitations of insider trading rules. The Board also
decided not to convey the acquired shares before the Annual General
Meeting of 2005.The company amended its Corporate Governance system in June so that
it now complies with the recommendation given to the listed
companies by the Helsinki Exchanges in December 2003.ASPOCOMP S.A.S.
In May, the Evreux Labour Court rendered its decision on redundancy
notices of the closing of the heavily unprofitable Aspocomp S.A.S. in
Evreux, France in 2002. According to the decision, Aspocomp should pay
to 388 persons issued with notice a compensation equivalent to six
months remuneration due to unfair dismissal. The estimated compensation
totals to approximately EUR 6.6 million.According to Aspocomp’s legal advisors, the decision is not in line with
established court practice. Aspocomp has appealed against the decision
and, based on current assessments, the legal processes are expected to
continue for some years before a final decision is made.IFRS IMPLEMENTATION
The Aspocomp Group will introduce IFRS (International Financial
Reporting Standards) in the beginning of 2005. Aspocomp has already
been recording all financial leasing agreements as assets and
liabilities since 1999. The fixed costs of finished product
inventories have been capitalized, and accrued tax liabilities and
receivables have been recorded.8(14)
In March 2004, it was decided that the disability pension portion of
the Finnish TEL system (TEL=Employees’ Pension Act) is to be treated
as a defined benefit pension plan in accordance with IFRS. This
means that the disability pension is to be entered as a long-term
liability. The amount of this liability will be determined when the
related mathematical insurance calculations are completed. In other
respects, the introduction of IFRS is not estimated to have any
substantial influence on the Group’s equity at the time of
changeover.PROSPECTS
The strong growth of mobile phone markets continued during the
second quarter, which increased the demand for Aspocomp PCBs,
particularly towards the end of the quarter. During the current
year, market researchers and device manufactures have estimated that
the total market will grow faster than was estimated previously. At
present, size of the market in 2004 is estimated to be approximately
600 million mobile phones or slightly more (the size of the market
in 2003 was over 470 million phones).The growth of the telecommunications network market during the first
half of the year was faster than expected, and it is also estimated
to continue at a reasonable good level during the latter half of the
year. The automotive and industrial electronics are expected to
continue their steady growth of a few per cent annually.Net sales of Aspocomp’s PCB segment are expected to increase during
the second half-year, and the profitability is expected to improve
slightly. The Mechanics and Modules segment is estimated to remain
on exceptionally good volume level during the second half-year, and
the last half of the year is likely to be similar to the first half-
year.Net sales and earnings in July-September are expected to improve
somewhat from the second quarter. Net sales, operating profit and
earnings per share for the whole year are expected to be
significantly better than in the previous year.In 2004, gross investments are expected to amount to less than 10%
of the Group’s net sales.ASPOCOMP GROUP INCOME STATEMENT, APRIL – JUNE
9(14)
4-6/04 4-6/03
MEUR % MEUR %NET SALES 52.9 100.0 42.1 100.0
Other operating income 0.3 0.6 0.2 0.6
Depreciation and write-downs 6.2 11.6 9.7 23.1
OPERATING PROFIT/LOSS 3.8 7.2 -6.3 -15.0
Financial income and expenses -0.3 -0.5 -0.3 -0.7
PROFIT/LOSS BEFORE
EXTRAORDINARY ITEMS AND TAXES 3.5 6.7 -6.6 -15.7Extraordinary income 0.0 0.0 0.0 0.0
Extraordinary expenses 0.0 0.0 0.0 0.0PROFIT/LOSS
BEFORE TAXES 3.5 6.7 -6.6 -15.7Taxes -0.1 -0.1 0.1 0.2
Minority interests -0.9 -1.7 0.7 1.6PROFIT/LOSS
FOR THE PERIOD 2.6 4.9 -5.8 -13.9EARNINGS PER SHARE 0.26 -0.58
Accrued taxes for this interim period have been calculated in
accordance with the corporate tax rate in force during the period
under review and they include taxes brought forward from earlier
periods.ASPOCOMP GROUP INCOME STATEMENT, JANUARY – JUNE
1-6/04 1-6/03 1-12/03
MEUR % MEUR % MEUR %NET SALES 100.5 100.0 83.2 100.0 182.3 100.0
Other operating income 0.4 0.4 0.4 0.5 1.2 0.7
Depreciation and write-downs 12.2 12.2 16.9 20.3 29.7 16.3
10(14)
OPERATING PROFIT/LOSS 6.5 6.4 -8.0 -9.6 -5.3 -2.9Financial income
and expenses -0.6 -0.6 -0.8 -1.0 -1.3 -0.7PROFIT/LOSS BEFORE
EXTRAORDINARY ITEMS AND TAXES 5.8 5.8 -8.8 -10.6 -6.6 -3.6Extraordinary income 0.0 0.0 0.0 0.0 0.0 0.0
Extraordinary expenses 0.0 0.0 0.0 0.0 0.0 0.0PROFIT/LOSS
BEFORE TAXES 5.8 5.8 -8.8 -10.6 -6.6 -3.6Taxes -0.1 -0.1 1.2 1.5 3.5 1.9
Minority interests -1.4 -1.4 1.4 1.7 2.2 1.2PROFIT/LOSS
FOR THE PERIOD 4.3 4.3 -6.2 -7.5 -0.9 -0.5EARNINGS PER SHARE 0.43 -0.62 -0.09
Accrued taxes for this interim period have been calculated in
accordance with the corporate tax rate in force during the period
under review and they include taxes brought forward from earlier
periods.BALANCE SHEET
6/04 6/03 Change 12/03
MEUR MEUR % MEUR
Fixed AssetsIntangible assets 3.7 4.9 -24.8 4.2
Tangible assets 101.2 115.7 -12.5 105.2
Investments 1.6 1.1 48.1 1.7Current Assets
Stocks 25.0 21.6 15.8 20.8
Receivables 55.0 48.8 12.7 52.7
Investments 13.0 0.0 – 20.8
Cash and bank deposits 13.1 13.1 – 8.9TOTAL ASSETS 212.5 205.1 3.6 214.2
11(14)
Shareholders’ equityShare capital 10.0 10.0 – 10.0
Other shareholder’s equity 93.7 88.3 6.1 92.1
Minority interests 22.8 23.9 -4.5 20.5
Mandatory reserves 2.3 2.4 -5.6 1.7
Long-term liabilities 25.4 33.2 -23.3 28.7
Short-term liabilities 58.2 47.3 23.1 61.3TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY 212.5 205.1 3.6 214.2CASH FLOW STATEMENT
4-6/04 4-6/03
MEUR MEURCash flow from operations 5.2 1.7
Cash flow from investments -3.7 -4.7
Cash flow before financial items 1.5 -3.0
Decrease in long-term financing -2.3 -4.0
Increase in short-term financing 1.4 0.8
Dividends paid -3.0 -2.5
Total financing -3.9 -5.7
Decrease/increase in liquid assets -2.4 -8.8
Liquid assets at the end of the period 26.1 13.1CASH FLOW STATEMENT
1-6/04 1-6/03 1-12/03
MEUR MEUR MEURCash flow from operations 9.8 4.5 25.4
Cash flow from investments -6.1 -6.0 -11.3
Cash flow before financial items 3.7 -1.5 14.1
Decrease in long-term financing -3.3 -4.2 -7.0
Decrease/increase in short-term financing -1.0 1.2 5.0
Dividends paid -3.0 -2.5 -3.0
Total financing -7.2 -5.5 -5.0
Decrease/increase in liquid assets -3.5 -7.0 9.0
Liquid assets at the end of the period 26.1 13.1 29.8BUSINESS SEGMENTS
12(14)
4-6/04 4-6/03 1-6/04 1-6/03 1-12/03
MEUR MEUR MEUR MEUR MEUR
Printed Circuit Boards
Net sales 40.5 32.1 76.9 64.1 142.5Printed Circuit Boards
Operating profit 1.3 -7.7 2.6 -10.3 -11.1Mechanics and Modules
Net sales 12.4 10.0 23.7 19.1 39.8Mechanics and Modules
Operating profit 2.5 1.4 3.9 2.3 5.8KEY FINANCIAL INDICATORS
6/04 6/03 12/03
Return on Investment (ROI) % 8.1 -8.6 -1.9
Return on Equity, % 9.2 -11.9 -2.4
Equity/share, EUR 10.36 9.81 10.20
Equity ratio, % 59.4 59.5 57.1
Gearing, % 19.6 34.7 20.3
Gross investments, MEUR 6.1 6.2 13.8
Average number of personnel 3.494 3.101 3.330
CONTINGENT LIABILITIES
6/04 12/03
MEUR MEURSecurities on Group liabilities 8.1 8.0
Operational leasing liabilities 0.2 0.2
Other liabilities 26.0 24.4TOTAL 34.3 32.6
13(14)
DERIVATIVE CONTRACTS6/04 12/03
MEUR MEUR
Foreign Currency Forward Contracts
Market Value 0.1 0.0
Nominal Value 1.5 4.6Electricity Forward Contracts
Market Value 0.1 0.0
Nominal Value 0.5 0.7All figures are unaudited.
Vantaa, 5 August 2004
ASPOCOMP GROUP OYJ
Board of Directors
For further information, please contact CEO Maija-Liisa Friman,
Tel. +358 9 7597 0711.ASPOCOMP GROUP OYJ
Maija-Liisa Friman
President and CEOPRESS CONFERENCE
A press conference intended for investors, analysts and media
representatives will be held on 5 August 2004 at 11:00 a.m. in the
Paavo Nurmi conference hall of Hotel Kämp at Pohjoisesplanadi 29,
Helsinki.ASPOCOMP IN BRIEF
The Aspocomp Group serves the electronics industry by supplying
high-tech electronic components and services such as PCBs (printed
circuit boards), and PCB-related designs as well as mechanics and
modules. Aspocomp’s products are used in the electronics industry,
14(14)
mobile handsets, telecommunications infrastructure, automotive and
other industrial applications. The Aspocomp Group’s production
facilities are located in Finland, China and Thailand. In 2003,
Group net sales were EUR 180 million approximately, and the Group
had some 3,300 employees. The parent company, Aspocomp Group Oyj,
has been listed on the Helsinki Exchanges since 1999.Some statements in this stock exchange release are forecasts and
actual results may differ materially from those stated. Statements
in this stock exchange release relating to matters that are not
historical facts are forecasts. All forecasts involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results, performances or achievements of the Aspocomp Group
to be materially different from any future results, performances or
achievements expressed or implied by such forecasts. Such factors
include general economic and business conditions, fluctuations in
currency exchange rates, increases and changes in PCB industry
capacity and competition, and the ability of the company to
implement its investment programme and to continue to expand its
business outside the European market.Distribution:
The Helsinki Exchanges
Major Mediawww.aspocomp.com